December 23, 2019
U.S. Oil & Gas Plc.
(“US Oil” or the “Company”)
East Prospect confirmed as viable conventional drilling target
Reservoir, trap and seal interpreted as present
Porosity and permeability likely good
Gross thickness of porous layers estimated at 300-450 ft
Continuity exists between porous horizons and oil-bearing zones found in Eblana-1 and Eblana-3
Three locations chosen for drilling
Permit applications for three wells in preparation
Intention to drill one well
U.S. Oil & Gas Plc, (“USOIL” or the “Company”), the oil and gas exploration company with assets in Nevada, is pleased to update shareholders on its operational progress.
Intensive interpretation work has been carried out a by Railroad Valley Analogue Project team comprised of geologists with in-depth experience of the adjacent producing field and focusing on East and West Plays in Hot Creek Valley. The team has now reported that assessment is complete for the Tertiary East Play, a likely analogue of Railroad Valley’s producing Trap Spring field.
Promising drilling targets have been identified by analysis and interpretation of well data from Eblana-1 and Eblana-3, four reprocessed 2-D seismic lines, gravity, magnetic and geochemical data, as well as VSP data from Eblana-1 along with energy absorption analysis. Further seismic was not deemed essential at this stage. The Company is preparing applications for permits to drill three wells, Eblana-8, Eblana-9 and Eblana-10. Eblana-9 will be the first well drilled. If commercial, the other wells will follow.
The interpreted reservoir lies in a porous zone of the Tertiary Volcanics, most likely in weathered tuffs (ignimbrites) and/or fractured vesicular basalt. This zone features a structural trap identified on seismic and well log data and appears to be locally closed by down-to-the east faults, separating the zone into three compartments. Seismic data supports the presence of an intact seal over the porous zones, with the top of each compartment sealed by non-porous volcanic flows.
At least three separate porous layers are visible on seismic in each of the compartments, with the shallowest of these being at 4,300 ft below ground surface and the deepest at 5,500 ft. Gross thickness of the porous layers is 300 to 450 ft. Based on the well log response of these layers in the Eblana-1 well, porosity is estimated at between 12% and 18%. Energy absorption analysis suggests hydrocarbons could be present in the porous units. Large seismic amplitude anomalies (bright spots) have been interpreted as directly indicating the presence of hydrocarbons, although other factors can also account for these effects. The planned Eblana-9 target horizon is approximately 1500 ft to 1900 ft above the same horizon present in the Eblana-1 well.
Due to limited seismic coverage, the full lateral extent of the reservoir is uncertain, but at a conservative estimate of 300 ft the surface area is 560 acres. Resources targeted in the well are provisionally estimated at 38-56 million bbls oil, assuming a 15% porosity and an oil-to-water ratio of 15:85.
Preparations for submitting the necessary Application to Drill the East Prospect, including well design and other elements, are at an advanced stage, and discussions have been initiated with regulatory authorities. These have indicated that the previously submitted Application to Drill for Eblana-1A can be transferred. It is expected that this will help expedite the approval process for Eblana-9.
Subject to regulatory permissions, the Company hopes to drill in Q1 of 2020.
Plugging of water wells
The water wells associated with Eblana-1, Eblana-3 and Eblana-6 have been successfully plugged.
The statements in this communication reflect the current thinking of the Board and the Company’s present plans. The Company reserves the right to alter plans in the light of developing knowledge and circumstances. Shareholders’ attention is drawn to the note below concerning Forward-looking Statements.
This press release contains certain “forward-looking statements” and “forward-looking information”. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to: business plans and strategies of US Oil and Gas; operating or technical difficulties in connection with drilling or development activities; availability and costs associated with inputs and labour; drilling and exploration costs; the speculative nature of oil exploration and development; diminishing quantities or quality of reserves; synergies and financial impact of completed acquisitions; the benefits of the acquisitions and the development potential of properties of US Oil and Gas; the future price of oil; supply and demand for oil; the estimation of reserves; the realization of reserve estimates; costs of production and projections of costs; success of exploration activities; capital expenditure programs and the timing and method of financing thereof; the ability of US Oil and Gas to achieve drilling success consistent with management’s expectations; net present values of future net revenues from reserves; expected levels of royalty rates, operating costs, general and administrative costs, costs of services and other costs and expenses; expectations regarding the ability to raise capital and to add to reserves through acquisitions, assessments of the value of acquisitions and exploration and development programs; geological, technical, drilling and processing problems; treatment under governmental regulatory regimes and tax laws.
All statements other than statements of historical fact are forward-looking statements
THE DIRECTORS OF THE COMPANY ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT
Neither this announcement nor the information contained herein constitutes an offer or solicitation by U.S. Oil and Gas Plc for the purchase or sale of any securities nor does it constitute a solicitation to any person in any jurisdiction where solicitation would be unlawful.
For further information contact:
Brian McDonnell, Chief Executive Officer +353 (1) 631 9022
About U.S. Oil & Gas:
U.S. Oil & Gas plc is an oil and gas exploration company with a strategy to identify and acquire oil and gas assets in the early phase of the upstream life-cycle and mature them. The Company’s
main asset is in Nye County, Nevada where it holds the entire share capital of US-based company, Major Oil International LLC (“Major Oil”). Major Oil has acquired rights to exploration and development acreage in Hot Creek Valley, Nye County, adjacent to the oil and gas rich Railroad Valley area of Nevada, both of which are part of the Sevier Thrust of central Nevada and western Utah, USA.
For further information please refer to our website at: www.usoilandgas.us